A strategic repositioning at Huntington Bancshares is proving to be a dud with bank stock analysts.

The Columbus, Ohio banking company, which outlined the plan when it reported first-quarter earnings last month, is now the lowest-rated stock tracked by American Banker. As the week began, analysts surveyed by Thomson/First Call had an average rating of 3.1, on a scale of 1 to 5, on Huntington stock - a rating slightly lower than "hold" and 0.2 points worse than before the earnings announcement. Shares were unchanged Tuesday at $18.25, off from a close of $22 on April 13, when Huntington reported earnings, and from a 52-week high of nearly $34.

"Earnings growth for the year is not going to be there," said Timothy Willi, of A.G. Edwards & Sons, St. Louis, who downgraded the stock to "reduce" from "maintain" after the earnings report.

The strategic changes are "intended to improve future revenue growth in targeted business segments," the company said. But analysts said the moves would constrain earnings over the short term.

"As the company repositions its balance sheet by selling securities and securitizing automobile loans and leases, we believe that this will … make it difficult to grow net interest income," wrote Fred A. Cummings, of McDonald Investments Inc., Cleveland.

Huntington had been trading at a premium to its peers, leaving little potential for short-term gains trading the stock, analysts concluded.

Mr. Willi said the plan to reposition Huntington's balance sheet "may be a positive in the long run," but would hamper their revenue growth this year. He lowered his 2000 per-share earnings projection for Huntington to $1.75 from $1.85. Huntington is said to be comfortable with a $1.89 earnings estimate.

Mr. Willi said he targeted shares of Huntington for a downgrade because they were trading at a "pretty rich" 12.5 times projected earnings.

A.G. Edwards is projecting a slowdown in the economy that could hurt banks across the board. Mr. Willi said the firm remains positive on banks that insulate themselves from that risk.

They include TCF Financial, of Minneapolis, which embarked on an expansion in 1998 and 1999 that is expected to begin adding to its revenues. He also likes BB&T Corp., Winston-Salem, which he described as "well run, but not getting the respect it deserves.

Cleveland's National City Corp. and KeyCorp face similar pressures, but the slump in earnings growth was already reflected in their share prices, in the seven to eight times earnings range.

Mr. Cummings reduced his 2000 earnings projection for Huntington to $1.80 from $1.86. He said the stock, at $21.50 at the time, was trading at an 11.9 multiple of projected earnings, when a multiple of 10 was more appropriate. "Even if bank stocks rebound," he said, "we expect [Huntington] to underperform the group."

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